The Peaks of the Internet

Saturday, July 28, 2007

The definition for hell-bent: Impetuously or recklessly determined to do or achieve something.

Cnet News had this article about Microsoft's Steve Ballmer being quoted as saying, "We are hell-bent and determined to allocate the talent, the resources, the money, the innovation to absolutely become a powerhouse in the ad business."

Now, I know it is the job of the CEO to be a type of cheerleader, but I have to question who is he talking to? I strongly suspect Steve Ballmer is addressing the shareholders as opposed to the consumers and clickers on the search engine ads.

There was a short time ago, where rumors were going around that Microsoft might buy Yahoo. This still might be a good deal for Microsoft to pursue. While Microsoft seems to have good search results, the fact remains, that only a very small percentage of people are using the Microsoft Live Search to find the information they are looking for on the Internet. Yahoo on the other hand has a larger market share of search and would be a great acquisition for Microsoft.

In June 2007, Google Sites maintained its spot atop the rankings with 49.5 percent of the U.S. search market. Yahoo! Sites captured second place with 25.1 percent of U.S. searches, followed by Microsoft Sites (13.2 percent), Ask Network (5.0 percent) and Time Warner Network (4.2 percent). Source comScore

Everything is about online search. Without the market share numbers to drive sales of Internet ads, it is rather unlikely that Microsoft is going to make a huge dent in the online advertising arena. How much money is Microsoft likely to invest in becoming a powerhouse for advertising? What drives advertising? Is it being hell-bent on becoming a powerhouse in the ad business that will ultimately earn the kind of revenues that Microsoft and its top shareholders are looking for? Or would it be more likely that becoming a powerhouse in Search, as Google has done, would make more economic sense for Microsoft to do. Instead of being reckless in "allocating the talent, the resources, the money, the innovation to absolutely become a powerhouse in the ad business," they should concentrate on Search. Advertising would then take care of itself.

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